Insights and experience, the foundation of brick-and-mortar success
By Dr. Yishai Ashlag, CEO & Co-founder, Onebeat
Physical stores have the potential to create highly customer-centric shopping journeys by turning shopping from a routine transaction into memorable engagement.
Indeed, 73% of consumers say that experiences and sensory engagement are increasingly important factors in their purchasing decisions, alongside price and product quality.
But this requires retailers to tailor offerings and experiences that resonate most deeply with shoppers, which in turn requires a keen understanding of basic customer behavior patterns – shopping frequency, preferred products, ongoing trends, and more.
Subscribe to TRBIt’s no coincidence that high-end retail stores – which often emphasize customer experience and exclusivity – are thriving even as mass-market malls struggle. These highly personalized, luxury experiences enhance the perceived value of any given product – but only when the customer finds the product they’re looking for with ease.
Real-World Shifts
Some online-first brands are catching wind of in-person value and experimenting with physical locations, while carefully measuring and optimizing inventory accordingly.
Skims, for example, Kim Kardashian’s multi-billion-dollar ecommerce shapeware brand, recently bet big on a brick-and-mortar store in Manhattan. The success of the move led the brand to open in-person pop-up experiences in the city, and launch a second branch in LA.
Retailers who succeed are those that can blend insights with experiences: leveraging data to remove operational bottlenecks and better appeal to customers’ desires. The common thread is agility and accuracy in inventory.
Inventory is Make or Break for Brick-and-Mortar
While an inviting, sensory experience can get shoppers in the door, brick-and-mortar sales are built largely on the effectiveness of inventory management. In other words, shoppers won’t – can’t – buy it if a store doesn’t have it.
This is where AI-driven operational efficiency is paramount. Real-time inventory accuracy at the SKU (stock-keeping unit) level is fundamental to delivering what shoppers want, when and where they want it. Without it, visiting a store leads to the frustration of a desired item unfound.
Think of retail operations like a highway – the slowest lane sets the pace for all other drivers. For physical stores, if a desired product isn’t available due to inaccurate stock tracking or inefficient replenishment, the entire customer experience suffers.
Here, the “Theory of Constraints” – a management philosophy focused on identifying and alleviating topline bottlenecks – offers a solution. By addressing the “slowest lane” – in this case, inventory management – retailers can optimize the entire system’s performance with a smoother, more responsive in-store experience that best meets shoppers’ needs.
Technology as Enabler
Optimal inventory management requires precision that goes beyond static planning and periodic stock counts.
This is where AI-powered analytic tools are the silver bullet.
These AI-powered solutions can ingest vast streams of data – point-of-sale transactions, supply chain movements, seasonal trends, local events, even weather forecasts – to anticipate item demand shifts even before they occur. Bolstered by technologies like RFID (Radio Frequency Identification) trackers, which can follow the movement of items in and out of stores in real time, AI enables a continuous, highly accurate view of what inventory is or isn’t available at any given store.
These technologies enable the full promise of physical stores – predicting demand shifts, ensuring availability, and turning intent-to-buy into immediate sales. It’s about more than simply knowing what’s in the back room; it’s about making sure the optimal items are in the back room at the optimal time.
Touch Down
The tactile experience of real-life shopping triggers an emotional connection that online retail simply cannot replicate – seeing, touching, feeling, smelling, or trying on a product can be a powerful motivator in the decision to buy.
The future of physical retail lies in blending experience with operational excellence – not just having products on shelves, but using AI-powered, real-time insights to ensure that the right products are available at exactly the right moment.
In a world where purchases can be won or lost in a moment, the brands which fuse the sensory engagement and gratification of physical experiences with the convenience of agile, real-time inventory management, will define the future of retail.
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